Financial Contrast: MainSource Financial Group (MSFG) versus Renasant (RNST)

MainSource Financial Group (NASDAQ:MSFG) and Renasant (NASDAQ:RNST) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Dividends

MainSource Financial Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.8%. Renasant pays an annual dividend of $0.80 per share and has a dividend yield of 2.0%. MainSource Financial Group pays out 34.0% of its earnings in the form of a dividend. Renasant pays out 33.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. MainSource Financial Group has raised its dividend for 6 consecutive years and Renasant has raised its dividend for 4 consecutive years. Renasant is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

MainSource Financial Group has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Renasant has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for MainSource Financial Group and Renasant, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MainSource Financial Group 0 1 0 0 2.00
Renasant 0 4 2 0 2.33

MainSource Financial Group currently has a consensus price target of $44.50, indicating a potential upside of 9.47%. Renasant has a consensus price target of $46.75, indicating a potential upside of 15.80%. Given Renasant’s stronger consensus rating and higher possible upside, analysts plainly believe Renasant is more favorable than MainSource Financial Group.

Valuation and Earnings

This table compares MainSource Financial Group and Renasant’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MainSource Financial Group $211.91 million 4.91 $49.43 million $2.12 19.17
Renasant $506.89 million 3.94 $92.18 million $2.42 16.68

Renasant has higher revenue and earnings than MainSource Financial Group. Renasant is trading at a lower price-to-earnings ratio than MainSource Financial Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

58.5% of MainSource Financial Group shares are owned by institutional investors. Comparatively, 67.7% of Renasant shares are owned by institutional investors. 4.8% of MainSource Financial Group shares are owned by insiders. Comparatively, 3.4% of Renasant shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares MainSource Financial Group and Renasant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MainSource Financial Group 23.33% 10.64% 1.21%
Renasant 20.66% 8.73% 1.31%

Summary

Renasant beats MainSource Financial Group on 10 of the 17 factors compared between the two stocks.

MainSource Financial Group Company Profile

MainSource Financial Group, Inc. is a bank holding company. The Company operates a banking subsidiary, MainSource Bank (the Bank), an Indiana state-chartered bank. Through the Bank, the Company offers a range of financial services, including accepting time and transaction deposits; making consumer, commercial, agribusiness and real estate mortgage loans; renting safe deposit facilities; providing personal and corporate trust services, and providing other corporate services, such as letters of credit and repurchase agreements. The Bank offers various loans, such as commercial loans, commercial real estate loans, residential loans and consumer loans. Commercial loans include secured and unsecured loans, including real estate loans, to individuals and companies and to governmental units within the market area of the Bank. It offers various deposits, which include demand, interest bearing demand, savings/money markets and certificates of deposit.

Renasant Company Profile

Renasant Corporation operates as a bank holding company for Renasant Bank, which provides a range of financial, wealth management, fiduciary, and insurance services to retail and commercial customers. It operates through three segments: Community Banks, Insurance, and Wealth Management. The Community Banks segment offers checking and savings, money market, individual retirement, and health savings accounts, as well as safe deposit and night depository facilities. It also provides commercial, financial, and agricultural loans; equipment financing and leasing; real estate?1-4 family mortgage; real estate?commercial mortgage; real estate?construction loans for the construction of single family residential properties, multi-family properties, and commercial projects; installment loans to individuals; and business and personal, and interim construction loans, as well as automated teller machine (ATM), online and mobile banking, call center, and cash management services. The Insurance segment provides insurance agency services, including commercial and personal insurance products through third-party insurance carriers. The Wealth Management segment offers range of wealth management and fiduciary services, which include administration and management of trust accounts comprising personal and corporate benefit accounts, self-directed IRA's, and custodial accounts; administers qualified retirement plans, profit sharing and other employee benefit plans, personal trusts, and estates; and annuities, mutual funds, and other investment services through a third party broker-dealer. As of December 31, 2017, the company had 180 banking, insurance, and financial services offices located in Mississippi, Tennessee, Alabama, Florida, and Georgia; 136 full-service branches and 13 limited-service branches; and 136 ATMs at on-premise locations and 16 ATMs located at off-premise sites. Renasant Corporation was founded in 1904 and is based in Tupelo, Mississippi.

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